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Merchant Cash Advance

GET QUICK ACCESS TO MONEY NEEDED TO GROW

Get a lump sum of capital to build your business

Get $10,000 to $2M.

No Cost or Obligation

SINCE 2010

86,000+ Business Trust Us

How It Works

Qualifications are less than banks.

Soft credit pull. Checking eligibility will not affect your credit score.

Are You Eligible For a Merchant Cash Advance? Get Financing with Same-Day Approvals.
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Time in Business

1 Year Minimum

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Yearly Annual Business Revenue

$200,000+

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Merchant Cash Advance Amount

$10,000 to $2M

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Personal Credit Score

500+

What is an MCA or Merchant Cash Advance?

A Merchant Cash Advance is a short-term financing option given to small businesses. You can get MCA financing with same-day approvals and funding. These cash advances are paid back through a percentage of the business’s future sales. The cash advance is available when a company needs money fast but doesn’t qualify for a traditional bank loan.

The merchant cash advance providers offer same-day funding for businesses with uneven cash flow or seasonal businesses. They’re ideal for any business with many daily credit card transactions.

HOW DOES A MERCHANT ADVANCE WORK?

Sometimes, especially in the early stages, a company needs immediate access to financing. There aren’t many options available regarding small business financing, and cash advances are one option.

You can secure a merchant cash advance for a percentage of your daily credit card purchases, and you’ll pay the company that provides the advance with a portion of your daily sales.

Rates on merchant cash advances are relatively high and determined by the factor rate times the principal advance. For instance, if a business is granted $100,000 with a factor rate of 20%, the total amount to repay is $120,000 ($100,00 x 20%). Payments are every day, depending on the terms of the advance.

The factor rate (not expressed as an APR since this is not a loan) is determined more by your business’ sales performance. Better revenue numbers can put you in a better position with a potentially lower factor rate.

A merchant cash advance does not require any collateral or business assets, so you can qualify for an MCA even if your business isn’t doing well financially.

However, the higher the risk associated with your business, the higher the factor rate. You may be eligible for a smaller amount at a higher rate if your business struggles.

Business Cash Advances – Terms and Features

A merchant cash advance application is quick and straightforward to fill out. You’ll need to provide basic information about your business and business finances and then wait for approval. Once approved, you can access cash quickly. This type of financing reflects your current cash flow and not your business’s financial health or your personal credit score. Very rarely will the merchant cash advance company require that you change processors.

 

Merchant Cash Advance Program Variables That Determine Rates and Terms

  • Time in Business
  • Type of Business (Sole-Prop, LLC, etc.)
  • Industry
  • Annual Revenues
  • Cash Flow
  • Average Daily Bank Balances
  • Bank Statements – Checking Account
  • Personal Credit Score
  • Business Credit Score and Business Credit Profile
  • Business Credit History
  • Web Presence (social media, company website, etc.)
Get $10,000 to $2M.

No Cost or Obligation

Here's What We Offer:

  • Our application process is quick, convenient, and entirely online with no-cost, no-obligation online applications.
  • As a small business owner, you don’t have to provide collateral or assets, and there’s no maturity date.
  • The MCA lending team quickly analyzes your company’s revenue based on daily credit card receipts to give you a decision in as little as a few minutes. The time to fund is a few hours or the next business day.
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Best Uses for Merchant Cash Advances

An MCA is a funding option that allows merchants to access cash through a bank account. These are “cash advances.” A merchant cash advance is a form of financing that provides operating capital in exchange for future credit card receivables at a discounted rate for firms that meet the requirements. Payouts are made based on a proportion of the company’s credit card sales or other revenue receivables. Therefore, there is no fixed payment term.

 

CONSIDERING MCAs vs. Conventional Loans?

  • Growth, Business Expansion, or Opportunity
  • New Hires & Payroll
  • Advertising & Marketing
  • Equipment & Inventory (funding options alternative to equipment financing)
  • Renovation & Upgrades
Get $10,000 to $2M.

No Cost or Obligation

Getting Approved for a Business Cash Advance

  • The minimum Credit Score Requirement is 500.
  • Special programs for scores 650+ and 700+.
  • The minimum period is 6 months in business.
  • Minimum $200K gross annual revenue.
  • We can pay off 1st and 2nd positions or go behind them as a 3rd position.
  • Current on rent or mortgage.
  • Liens up to $200K on a payment plan are OK.
  • We’ll consider a lower lien without a payment plan.

 

Will My Company Be Approved for a Merchant Cash Advance?

If you answer yes to any of the questions above, you may qualify for an MCA. You will need to provide us with at least 3 months of bank statements or invoices. We will also consider your current financial situation and the use of the money. If you struggle to pay bills, you could benefit from an MCA.

Our team understands that timing is essential when you need money quickly, so we offer our services with fast approvals and funding.

 

What Types of Businesses Should Use a Merchant Cash Advance?

An MCA helps small businesses get access to working capital when they need it. As described above, an MCA is structured to provide cash to companies that accept credit cards.

These cash advances are when businesses run out of working capital because they offer quick access to funds. However, this. funding option comes with higher factor rates and fees. As a result, they are best for businesses with strong cash flow.

An MCA is an excellent tool for any business that needs extra cash during the slow season.

 

How About a Merchant Cash Advance with Bad Credit?

Yes. Suppose you’re applying for a merchant cash advance. In that case, alternative funding companies will look at your personal or business credit to decide, but this may not be the only factor. When deciding whether or not to offer money to your company, merchant cash advance companies may also consider your company’s revenue, time in operation, and accounts receivables. The result is a higher approval rate. Traditional bank loans and institutional lenders like credit card companies will focus primarily on the business owner’s personal credit score at the big three credit bureaus and secondarily on the other factors.

 

Can Your Company Benefit from a Merchant Cash Advance?

Merchant cash advances are often easier to qualify for than other types of loans. The application process is usually fast; you may get an answer within hours and receive funding the same day. You should be aware that the factor rate on a merchant cash advance is usually higher than a traditional loan. However, the advantage is that you can pay back your advance quickly and easily.

An MCA is an excellent solution for business owners needing immediate access to working capital. You don’t need exceptional credit scores to qualify, and an MCA can also be a perfect option to grow or expand your business.

Get $10,000 to $2M.

No Cost or Obligation

The Pros and the Cons of a Merchant Cash Advance

An MCA is perfect when you need money fast. Most businesses will not qualify for a traditional loan because they do not have collateral.

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Merchant Cash Advance Pros

  • Rates can start as low as $1.15. For example, for every $100,000, the flat fee payment is $15,000. At the 35% tax bracket after the tax write-off, the cost is $9,750 (consult with a tax professional).
  • It’s Quick, Simple, and Easy with very minimal paperwork.
  • Payments are a small percentage of your daily credit card sales.
  • You don’t need to change your merchant payment processors – we batch through ACH.
  • Variable payments – pay less on slower days and more on busier days.
  • The MCA does not report to your personal credit report. Poor credit, OK. Discharged bankruptcies after one year.
  • Use of funds for anything business-related. No collateral.
  • Funding 24 hours
  • Amounts $10,000 up to $2,000,000
  • Renewals after fifty percent repaid.
  • We increase amounts and give you better rates with each renewal once you have established a relationship with us.
  • Special programs for Retail Businesses, Online Businesses, Restaurants, Retail Shops, Liquor Stores, Auto Repair, and Healthcare
  • Excellent program for businesses that have excessive NSFs and low average bank balances on their business bank account statements that may not qualify you for a traditional short term loan. Superb business financing options with flexible terms and fast access to capital, especially if you have strong sales.

Disadvantages

An MCA is not a debt instrument like a loan. Instead, a factor rate is applied to the amount paid back for each day’s business receipts.

It considers your past business revenue history, and your daily (or weekly) payments will vary based on your business’s cash flow. As a result, an MCA could be more expensive than a loan.

  • More expensive than traditional bank financing; High-interest (factor) rate
  • Variable payment amounts
  • Not fixed payments
  • Daily or weekly payback – monthly payments options for well-qualified only.
  • Must accept credit and debit cards

MCA FAQs

Merchant cash advances are available to almost any business, as long as they have daily credit card sales or monthly. Examples of the companies that qualify for merchant cash advances are restaurants, dry cleaners, dentists, doctors, hotels, and many others. At Sunwise Capital, we work closely with our clients to choose the best financing plan to meet their needs.

Our objective is to help you get your business funding. We understand that every business is different, and we will work with you to find the right solution for your needs. We also understand that every business owner knows what they want to achieve with their business. Alternative lenders have no limits on how you use your merchant cash advance.

A business cash advance is an unsecured funding option based on future credit card sales and debit card sales (future receivables). You pay a fee or factor rate on the cash advance, and a merchant cash advance is paid back within 90 days to 12 months (or longer). However, there are many risks associated with using a merchant cash advance.

For example, the lender could report a default to the credit reporting agencies, making it harder for you to obtain other types of financing. Also, the lender might report a default to the consumer reporting agencies, harming your business credit score.

An MCA is an alternative financing option for small businesses. It provides immediate access to working capital, allowing them to purchase inventory, pay bills, or hire employees.

Applying to a business cash advance is simple, straightforward, and 100 percent online.

Approvals can take minutes, and funding can be in a few hours. Once we review and approve the application, the money gets paid directly into your bank account.

We also offer flexible funding options, including monthly installments, for those qualified, which means you can repay an advance over time.

MCA doesn’t care about your credit score but focuses on your business performance. Conventional bank loans often take weeks to process, and you may have to wait months before getting the loan. But with merchant cash advances from Sunwise Capital, you can apply and get the funds today.

We don’t judge you by what you’ve done in the past, and our goal is to help you succeed in the future. We will give you a fair chance to be approved for an MCA, even if you have bad credit.

A merchant cash advance calculator will help you calculate an MCA advance’s cost and repayment terms. When applying for an MCA, it can be hard to understand the fees and payments.

Using a merchant cash advance calculator can make your life easier. You can also compare different lenders to see what works best for you.

 

Merchant Cash Advance Payment Structure

An MCA is not a debt and is an advance against future purchases. As such, the payment method may seem foreign to you. The merchant cash advance provider will debit money from your daily transactions to repay the MCA, though others allow weekly debits.

If your MCA requires a daily payment, there is usually no grace period. Unless otherwise stated, you will need to pay back the MCA the day after the funds’ disbursement.

A holdback is a percentage of your daily credit purchases deducted from your account daily. Usually, this percentage is between 10% and 20%. If you generate $100 daily, you will owe $10-$20 to repay the advance.

 

KEY NUMBERS FOR CALCULATIONS

  • Amount of cash advance you will receive from the lender.
  • Factor rate (converted to a decimal)
  • Fees (may be referred to as administrative cost, origination fee, or closing fee)
  • Average daily/monthly credit card sales
  • Percentage to be withheld from daily sales

With this information, you can calculate approximate daily payments, how long it will take to repay the advance, and the total amount you can expect to pay.

 

The Process to Apply for a Merchant Cash Advance

The application is straightforward. Every cash advance provider will need you to provide proof of minimum monthly revenue. If you want a merchant cash advance, you’ll need to submit a one-page application and copies of your bank statements from the previous three months.

 

Do You Think a Merchant Cash Advance Is the Right Choice for Your Company??

A merchant cash advance can be helpful when you need money fast, but it can also cause problems if you aren’t careful. A business cash advance can be beneficial for many reasons, including helping small businesses through temporary cash flow problems. Another good reason for using a merchant cash advance is when you need money for a short-term project, like purchasing inventory.

Merchant cash advances are not loans but a way for merchants to get short term financing against future sales. It’s when a merchant needs money quickly to cover unexpected expenses.

 

Can You Explain How I Can Get Out of My Merchant Cash Advance?

Applying to multiple MCAs can get expensive fast, and stacking them on top of each other doesn’t help you either. It would be best if you prioritized repaying your cash advance in full before applying for any additional financing.

  1. 1. Try to replace your merchant cash advances with a more traditional small business term loan to break the cycle of debt.
  2. 2. Use collateral or assets to get an asset-based loan.
  3. 3. Renegotiate.
  4. 4. Try a consolidation loan.

 

What Happens if You Default on a Merchant Cash Advance?

If you default on an MCA, your payment history will report to the business credit bureaus, and you might also lose access to financing in the future.

Defaulting on any loan or cash advance can cause a cascading effect. The merchant could come after your assets if you signed a PG (personal guarantee). However, most MCA companies do not ask for that PG.

Bear in mind that if you switch bank accounts, change your merchant account processor, start taking mostly cash or impede and hamper the ACH payments, this can constitute default.

 

Alternatives to Merchant Cash Advances

Many business financing options are available to a smaller business, even with a less-than-perfect credit history. Some others include short-term and long-term loans that can help companies to get through hard times.

There are options even if your business doesn’t qualify for an SBA or bank loan.

 

Business Line of Credit

Asset-Based Loans

ABLs are an excellent small business loan option for businesses that need capital quickly. Specific items owned by the company secure these types of loans. For example, if you own a manufacturing company, you can use your inventory as collateral to get a loan.

Asset-based loans are also helpful when you’re trying to grow your business but don’t have enough cash flow to fund growth. If you’re looking for funding options to expand your business, consider using an asset-based loan.

 

Revolving Credit Line

A revolving line of credit is unsecured debt financing for businesses that allows owners to take money anytime. A typical example is a credit card. Banks and other financial institutions often offer revolving credit lines. If the company does not repay the loan within its term, the lender will charge additional fees and interest to recoup the loaned amount.

 

Factoring

Instead of waiting for clients to pay you, you can get cash today by selling your accounts receivable through factoring.

 

Accounts Receivable Financing

A/R financing allows businesses to acquire money against their accounts receivable. If you sell products to someone else, you’ll get paid first before paying back the bank.

Accounts receivable financing works best when selling high-ticket items like cars, furniture, electronics, and appliances.

You’ll need proof of sales and profit margins to qualify for an account receivable line of credit.

 

Calculating the cost of a Merchant Cash Advance

Since you are paying more than the amount advanced, how do you calculate the payment schedule?

This factor rate will vary among small business lenders. The quoted percentage helps you estimate the total amount to be repaid.

For example, if you agree to pay the advanced amount plus 15%, you can multiply the amount advanced by 1.15.

You must consider any processing fees associated with the merchant cash advances terms.

To determine how long it will take to pay back the cash advance, consider the cash advanced and multiply it by the factor rate.

Take a cash advance of $100K with a factor rate of 1.15. Multiply $100K by 1.15 = $115,000.

Assume a 9% holdback of the daily credit card business.

Divide your monthly sales ($100K) by 22 (days in the month). Take that number and multiply it by the holdback. $100K / 22 = $4545 (average daily sale).

Multiply that number of $4545 X 9% = $409. That is what you’ll pay daily.

Divide $115,000 (total amount owed) by $409 = 281 (payments to equal $115K). Assuming 22 days in the month, take 281 and divide by 22, which equals 13 or the approximate number of months to pay the advance.

You can use loan calculators to determine your lump sum amount, factor rate, and term to generate the payment amount.

 

Why are Factor Rates so High?

An MCA is a short-term cash advance against future receivables that allows a business owner to receive a lump sum of capital against future credit card transactions. These advances are to help cover immediate expenses. However, they do not charge interest; instead, it’s a flat fee. Because of the risk of these transactions, they often come with higher rates than a traditional loan.

 

APPLY NOW

A Merchant Cash Advance (MCA) is a type of financing that allows small businesses quick access to capital. Merchants can invest in their business immediately, giving them access to the funds they need to grow their business.

The process is simple: you apply online, and within 24 hours, you’ll receive approval from a lender who will provide you with the money you need.

Once you have the funds, you can use them however you’d like. You can pay employees, cover payroll expenses, or invest in marketing.

Whatever you choose to spend the money on, it’s yours to keep.

If you’re ready to apply for an MCA, call 888.456.9223 or fill out the form below.

Get $10,000 to $2M.

No Cost or Obligation